Title

Author

Publication Type

Journal Article

Publication Date

5-2012

Abstract

Family ownership and control is prevalent. For example, family firms account for about one third of S&P 500 firms and approximately one half of S&P 1500 firms (Anderson and Reeb 2003; Chen, Chen, and Cheng 2008).1 The presence of the founding family significantly influences agency conflicts within a firm. On one hand, family ownership and control leads to better monitoring of chief executive officers (CEOs), alleviating conflicts of interest between shareholders and managers. On the other hand, family ownership and control can lead to family entrenchment and conflicts of interest between family shareholders and other shareholders. Such unique agency conflicts in family firms likely have important implications for firm decisions. In this paper, we examine how family ownership and control affect CEO turnover decisions.